The Broker INSIDE THIS ISSUE - Brokers Ireland
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
The Broker
THE OFFICIAL MAGAZINE OF THE PROFESSIONAL INSURANCE BROKERS ASSOCIATION ISSUE 46 AUTUMN 2014
INSIDE THIS ISSUE
Pension Levies
Platforms – There to be stood on!
A Tale of Two Markets
TO BE FINALISED
A STRONG PLAYER IN THE
GROUP PENSION MARKET
Tailored Administration & Service
■ Partnership approach
■ Dedicated administrators
■ Qualified and experienced support staff
■ Pension clinics for members Your Pensions Partner
Unrivalled Investment Choice
■ Independent, global investment managers
■ Over 50 funds to choose from
■ Unique default investment options
■ Standard suite of 12 funds
Cutting Edge Technology
■ Up to date scheme information
■ Live fund performance information
■ Tailored investment ezine
To find out more talk to your
New Ireland Broker Consultant.
taking care of you...
New Ireland Assurance Company plc is regulated by the Central Bank of Ireland. A member of Bank of Ireland Group.
The BROKER
Editorial
Over the summer I went through a project of • A Guide to Developing Business Strategy for Financial
embedding a number of Financial Broker product Brokers
brochures and guides into our website. This was • A Guide to Marketing your Business for Financial Brokers
a ‘practicing what I preach’ sort of exercise and • A Guide to Digital Marketing and Social Media Planning
something I have been planning for a good while now.
Was it a good idea? Yes. Did it take a long time? No. These documents were written to assist you in bringing
Do my clients like it? Yes. So why didn’t I do it sooner? greater success to your businesses. If you want to
DONAL MILMO-PENNY
I could give you ten reasons / excuses off the top of do something between now and Christmas to grow
Chairman
my head! When I really challenge myself to answer a your business, I challenge you to download one of
question like this, invariably the truth lies somewhere these documents a fortnight and start developing and
around it not being a priority: I was too busy looking implementing strategy from them. On the PIBA site you will
after clients or administering my business or enjoying also find other useful documentation developed through
time on the beach in Wexford with my family. Those the Financial Broker project. These are not the only resources
are not the world’s worst problems, but they are ones offered to our businesses. Many of the insurance companies
faced by many Financial Brokers. also provide support outside of their regular CPD activity.
This may often come in the form of technical support on
We are generally too busy with existing clients or looking product or situation specific matters; however they also
for new ones to take a step back and work on our business. offer support at a strategic level. Friends First and Standard
Working on our businesses as opposed to solely in them is Life have in recent times been running courses over multiple
important if we want to prosper. Think about it: what if you modules that aim to assist Financial Brokers in developing
developed a strategy that gave you a steady feed of new their businesses.
clients? What if you developed a plan to double the return
you make from your existing client base? I can guarantee Working on our businesses is as essential as working in
you one thing: there is no magic route to success in this them. Sure there is little point in spending all your time
business. Success is built on your actions, activity and the strategising and no time acting: the outcome would be
value you offer to clients. Most SME business owners are predictable. Allocating a little time, however small, to
not well resourced when it comes to developing strategy planning your own future will go a long way. Plans are now
or processes that will benefit their businesses. Fortunately being laid for a Financial Broker conference in the New Year
nothing could be further from the truth for Financial which will focus on practical ways to improve your business.
Brokers like us. Take a look at the following documents When I go to a conference I feel it’s been a success if I take
on the Resource Centre page in the members’ section of away one or two good usable ideas. If that’s a fair measure
the PIBA website, http://piba.ie/resources/130-best- of success, next year’s Financial Broker conference should be
practice-guides-research-documents. very well worth attending. Watch this space.
Autumn 2014 1
IRISH LIFE’S INVESTMENT MANAGER
WINS TOP EUROPEAN PENSION AWARDS
Pictured with the Awards:
Patrick Burke (ILIM), Bill Kyle and Gerry Hassett
H Only Irish Winner H Only Investment Manager to win two awards H
We are delighted to announce that Irish Life Investment The innovative features of our Multi-Asset Portfolios (MAPS)
Managers (ILIM) scooped two awards at the prestigious funds, such as Dynamic Share to Cash (DSC) and our
European Pension Awards 2014. Minimum Volatility was key to these awards. These awards
place the science behind our MAPS funds at the highest level
in Europe.
Equities Manager of the Year For more information on how MAPS can help you and
your clients:
• Contact your Account Manager, or
• Visit bline.ie
Passive Manager of the Year
Warning: The value of your investment may go down as well as up.
Warning: If you invest in these funds you may lose some or all of the money you invest.
Warning: These funds may be affected by changes in the currency rates.
ILA 11193 (NPI 07-14)
Irish Life Assurance plc is regulated by the Central Bank of Ireland.
Irish Life Investment Managers is regulated by the Central Bank of Ireland.
The BROKER
Pension Focus
The Financial Broker technical guides focus on a number of key areas. Our from Financial Brokers when asked why they do not engage in this area
previous issue focused on business strategy. This issue will preview the include:
three best practice guidance papers on pensions, namely: • There is too much administration for a firm my size.
1. Pre-retirement guide to Individual Pension Arrangements • That sector is for Corporate Brokerages only.
• There is too much complexity.
2. Guide to Post-retirement Income Planning
Financial Brokers should not avoid this area of pension advice, as this segment
3. A Guide to Group Pensions and Group Risk Benefits for Financial
accounts for 20% of the overall pensions marketplace. The benefits of engaging
Brokers.
in this area of advice include additional income and providing a platform for
The future landscape of pensions is rapidly changing. This is supported additional advice (group risk, income protection, individual clients); whilst also
by the fact that it is estimated that by 2050, there will be a 2:1 ratio of increasing the value of your Brokerage and expanding your client base.
workers to retirees in Ireland, as opposed to the ratio of 5:1 working today, James Skehan of New Ireland authored the group pensions guide, which
to support the social welfare system on which many pensioners solely was published in July of this year.
rely. This assumption indicates that the current social welfare model will The guide focuses on two aspects of group pensions. The initial focus is on
not be able to support these changing demographics by 2050, thereby the design of the scheme. This includes legal structures and the composition of
elevating the need for all workers to adequately provide for their own features such as the investment strategy or AVCs.
private pensions. The second part focuses on the management and servicing of the group
This analysis, whilst daunting, is also an opportunity for Financial scheme. This includes the obligations around training and meeting new
Brokers who are not fully engaged in the pension advice market. The members, as well as procedures for what can become complex issues over time
‘pensions time bomb’, which many of us will have seen referenced in as the scheme matures. Issues such as the Personal Insolvency Act (2012)
multiple studies and presentations, is a compelling tool for Financial and civil partner litigations are some of the contemporary aspects of complex
Brokers to utilise in encouraging clients to engage in pension planning. advice that are explained.
The pre-retirement guide, authored by Jim Connolly of Standard Understanding group pensions will complement an advisor’s knowledge of
Life, was issued late last year. The introduction notes that the pensions individual pension provision. Financial Brokers should not shy away from this
industry has a well-deserved reputation for being complicated. This business, and this group pension guide will give your Financial Brokerage the
complication is unnecessary in parts; however it does emphasise the tools to actively engage in this sector.
need for a Financial Broker. The guide to post-retirement planning was released to Financial Brokers
This guide covers several key areas including Revenue, transfers and in 2013. This accompanying piece to the two aforementioned pension guides
overseas transfers, as well as specific products such as PRSAs, BOBs and was devised to not only offer technical guidance around post-retirement
executive pensions. planning, but also to offer context to advisors as they engage in pre-retirement
The transfer system is a prime example of the level of complexity faced planning with clients.
when advising clients in this area. There are many references to pension The area of post-retirement planning has changed dramatically since
vehicles that Financial Brokers must encounter including: 2010. Cap reductions, subsequent altering of the commutation calculations
and generally poor annuity rates in the market have left a retirement advice
PPP Group DC BOB / PRB industry in flux.
SSAS PRSA AVC AMRF With this in mind, Pat Ryan (former head of pensions in Canada Life, now
RAC Group DB EPP with Davy Asset Management) was asked to draft a guidance paper. The guide
OPS Non Standard PRSA CPA addresses a number of key areas that must be assessed when advising a client
as they approach their retirement, as well as the management of their funds
PRSA ARF AVC
in retirement.
Our pre-retirement guide can assist those unfamiliar with the transfer The post-retirement guide analyses where post-retirement planning both
network in understanding how these interact during retirement planning. begins and ends and the issues of longevity; as well as the merits of purchasing
The average worker moves employment seven times in their lifetime, an annuity versus the AMRF/ARF route, if open to a client.
often leaving these benefits where they are or carrying them with them, Ultimately, the need for private pension planning will only grow, with
with little knowledge of the value or consequences. The buy out bond Financial Brokers well placed to participate in individual pension provision.
(BOB) market has seen substantial growth, which reflects this trend. The These three guides map out and explain all the key areas of pension advice for
BOB sector has grown from €220 million in 2008 to €607 million in a Financial Broker.
2011. * These guides will be revised over time to reflect legislative and
Our pre-retirement guide is a comprehensive resource for pension budgetary changes.
advice for both new and existing clients, allowing you to navigate these
areas with confidence. Each quarter we will review the various resources available to you
Many SME Financial Brokerages focus on the individual pension advice through the Financial Broker initiative. To request copies of the guides,
market, whilst ignoring the group pension market. Common responses please email paul.kelly@piba.ie.
Spring 2014
Autumn 2012 3
Financial Planning & Guidance
Setting out best practice
for Financial Brokers...
Financial Planning & Guidance
Financial Planning & Guidance Financial Planning & Guidance Financial Planning & Guidance
The Value
of Advice
V V V
One – Unified Voice One – Unified Voice
U U U
The path to a more financially secure future One - Unified Voice
A guide for developing A guide to eliminating
A guide to the
O O O
Business Strategy for provider bias for
Financial Brokers Financial Brokers
financial security
of life companies A Guide for Financial Brokers A Guide for Financial Brokers
A Financial Broker Report
September 2013
Creating your success through Creating your success through
Financial Planning Financial Planning
Creating your success through
Financial Planning www.financialbroker.ie
Financial Planning & Guidance Financial Planning & Guidance Financial Planning & Guidance Financial Planning & Guidance
One – Unified Voice One – Unified Voice One – Unified Voice One – Unified Voice
A Guide to Digital Marketing A Guide to Marketing your Investment Meeting Client
and Social Media Planning Business for Financial Brokers Recommendations and Reviews Investment Needs
Connecting online and offline sales and How to develop and deliver a structured and A Guide for Financial Brokers A Guide for Financial Brokers
marketing plans to deliver incremental creative marketing plan to boost the income
and sustainable growth and profit levels of your business
Financial Planning & Guidance Financial Planning & Guidance Financial Planning & Guidance Financial Planning & Guidance Financial Planning & Guidance
Creating your success through Creating your success through Creating your success through Creating your success through
Financial Planning Financial Planning Financial Planning Financial Planning
One - Unified Voice One – Unified Voice One – Unified Voice One – Unified Voice One – Unified Voice
Addressing A Guide to Post-Retirement Pre-retirement guide to A Guide to Group Pensions A guide to Financial Planning
Investment Risk Income Planning and Options Individual Pension Arrangements and Group Risk Benefits Recommendations and
A guide for Financial Brokers A Guide for Financial Brokers A Guide for Financial Brokers
for Financial Brokers Statements of Suitability
A Guide for Financial Brokers A Guide for Financial Brokers
Creating your success through Creating your success through Creating your success through Creating your success through Creating your success through
Financial Planning Financial Planning Financial Planning Financial Planning Financial Planning
www.financialbroker.ie
Creating your success through
Financial Planning
The BROKER
Pension Levies
With Budget 2015, you might be forgiven for wanting to see few If we are to be community minded about pension funds, one
or no changes for our sector. After the fiscal ravages of recent could ask why the public sector wasn’t asked to participate in these
years and much change in pension taxation and reductions in levies. Yes there are no funds, but the accrued benefits could have
relief, a year without major change would probably be welcomed been reduced by 0.6% and 0.15%. It is indeed remarkable how
by most Financial Brokers. public sector pensions have remained basically intact despite the
No change would only be welcomed, however, if this included financial crisis. Changes made (career averaging, later retirement
the planned expiry of the 0.6% pension levy. This four-year levy, ages etc.) apply to new entrants, not to existing benefits or the
introduced only on private sector pensions in 2011 to fund job future accrual of benefits to the existing public sector workforce.
DIARMUID KELLY creation measures, is due to run its course and finish this year. The change from salary to CPI linking of pensions in payment is
Chief Executive The danger of course is that this very passive form of taxation still a discretionary decision of government.
PIBA (yielding over €540m per year at 0.6% of €90bn) is a bit of Public sector unions have been making noises about their
a ‘gimme’ for a cash-starved Government looking to get re- ‘pension levy’ contribution/deduction. The Pension Related
elected in the next 18 months. The industry must be vigilant for Deduction came into effect in 2009 and averages 8.6% of
measures to stretch it further. incomes in the public sector. However the cost of providing
The extension of the levy could be seriously damaging to benefits is a multiple of this, especially for occupations with early
Defined Benefit (DB) pensions, many of which have struggled retirement options. If the unions in the public sector want reform
to regain solvency in recent years by a combination of cuts of this deduction, perhaps it is worth considering alongside
in benefits and extra pension contributions from employers genuine reform of existing benefit structures in that sector.
and workers. The levy has been factored as temporary in their Even before the crisis, these benefits looked particularly well
calculations but this assumption will be difficult to sustain if the gilded compared to the private sector norms. Now with all that
levy is rolled over this year. has happened in the last seven years — the decline in GNP/
The danger of rolling over the levy is heightened by the wealth, low growth rates, the ravaging of private sector pensions
decision in the last budget to introduce a supplemental levy (DB and DC) and the effective abolishing of the National
of 0.15%, which was indicated to run this year and next. Two Pensions Reserve Fund — it is pure fantasy to assume that
factors were cited for this additional levy — compensation for the public pensions can be sustained into the future at current
the Waterford Crystal workers who lost their pensions, and the rates. Unions may be better to settle for smaller, sustainable DB
gap between industry projected savings and realised savings pensions with DC structures for salaries above €60k. The public
from the pension cap of €60k. In relation to the latter, the gap purse and society at large might be better served by a fairer
arose from the decision to retain accrued benefits at the old 20:1 structure of contributions and benefits.
value ratio — a decision that would have benefited That would be a deal worth celebrating, but perhaps will only
highly paid civil servants close to retirement. And be realised over a longer horizon. In the meantime let’s hope for
who would have made that decision? It the departure of the entire 0.6% levy on private pension funds
was not suggested by the industry. this year.
Autumn 2014 5
The BROKER
Industry Round-Up
Irish Life celebrates 75 years Friends First Golf Marathon in aid
It’s an exciting year ahead for Irish Life, as the of the Irish Cancer Society raises
company marks a very significant milestone as it €30,000
turns 75. The company has been operating since Friday the 13th of June proved to be a very lucky
1939, and plans to mark the anniversary with a day for the Irish Cancer Society as six stoic golfers
number of initiatives in the coming months for took on the challenge of playing four rounds of
employees, customers, business partners and the golf on one course in one day. Playing 72 holes
community as a whole. took a massive 16 hours to complete and raised
Irish Life has a proud history, beginning in much needed funds for a very worthy cause. The
1939, when four Irish Life offices and the Irish Irish Cancer Society relies on the generosity of
operation of British Life came together to form the public for 94% of its income.
the Industrial and Life Assurance Amalgamation JP Hughes, who led the challenge, and Friends
Company. Over the years Irish Life has gone First wish to thank all of the Financial Brokers who
through many changes, from being a public contributed; and of course the golfers involved,
company to floating on the stock exchange in whose tremendous efforts raised around €15,000
1991, all the way through to the present day, from donations, which was then doubled by
which sees Irish Life as a part of the Great-West Friends First to total over €30,000. As part of
Lifeco group of companies. the Friends First Corporate Social Responsibility
Today Irish Life is Ireland’s leading life and Friends First staff raised €30,000 by programme this year, Friends First will match the
pension company, providing over one million cycling 300 kilometres from London accumulated donations from all staff-related
customers with risk protection, pensions, savings to Amsterdam for the Lessons for charitable activities for four specific charities,
and investment products; and managing more Life Foundation including The Irish Cancer Society.
than €40 billion of assets. Five Friends First staff (Brian O’Neill, David
A series of new promotional initiatives will be O’Neill, Richard Gallagher, Lucilla Flinter and
launched in the fourth quarter to celebrate Irish Gillian Jennings) recently took on the immense
Life’s 75 years and to encourage people to plan challenge of cycling 300 kilometres over two
for their futures by contacting their Financial days for the Lessons for Life foundation — one
Broker. of Friends First’s four nominated charities for
2014. Rigorous training over several months Group Pensions and Group Risk
Zurich’s Pathway Funds exceed €200 beforehand ensured that all were ready to take Benefits Guide for Financial Brokers
million! * on the biggest challenge they had ever willingly The PIBA Autumn Seminar in Galway saw the
The Pathway Funds consist of five diversified, risk signed up for! official launch of PIBA’s Guide to Group Pensions
targeted multi-asset funds that are designed to Their individual pre-cycle fundraising efforts and Group Risk Benefits for Financial Brokers,
generate long-term capital growth by targeting were monumental in their own right, including authored by James Skehan, New Ireland.
specific levels of volatility with returns appropriate pre-loved clothes sales, tea parties and a The guide provides an A - Z of group pensions
to your clients’ risk profiles. Launched last October, stationary cycle in Dundrum Shopping Centre; and group risk business and should prove a
they are proving to be extremely popular with not to mention the generosity of their friends valuable resource tool for Financial Brokers.
advisors. and family. They raised an incredible €15,000, To download a copy of the guide visit the
In just ten months our Pathway Funds which was then matched by Friends First to members section of the PIBA website or e-mail
have exceeded €200 million in assets under total €30,000. paul.kelly@piba.ie.
management. We could not have achieved this The Charity — Lessons for Life breaks
milestone without you! We would like to take the poverty cycle by making sure that Africa’s
RIGHT
this opportunity to thank you for your continued poorest kids get a good education. Without an
Pictured at the event were:
support. education or skills-based training, the people of
James Skehan (Head of Pensions, New Ireland Assurance)
For more information on our Pathway Funds, Africa end up trapped in extreme poverty. Paul Kelly (Financial Broker Manager, PIBA)
just speak to your Zurich Life Broker Consultant or By focusing on education, they’ve set Diarmuid Kelly (PIBA Chief Executive)
visit the ‘Fund Choice’ section on zurichlife.ie. 16,000 children on a path to better paid work, James Skehan (Head of Pensions, New Ireland Assurance )
financial independence, safety and hope. Donal Milmo-Penny (PIBA Chairman)
* Source: Zurich Life, August 2014.
Zurich Life Assurance plc is regulated by the Central Bank They get children learning in safe, inspiring
of Ireland. classrooms and support families while they
learn. Their combined approach means that
they turn lives around, not just of one child, but
of whole communities.
6 Issue 46
36
The BROKER
Friends First Sponsors St Tiernan’s
Cycling Club’s Laragh Classic for its
second year
Friends First were delighted to sponsor St
Tiernan’s Cycling Club and the inaugural
Laragh Classic Race in 2013. This year we
have increased our support, and this will
enable the club to hold three races, including
a headline A1/A2 event, which will be open
to the top riders in Ireland. We hope that the
challenging race circuit and generous prize
fund continues to attract big numbers on the
day.
Commenting on the sponsorship, Brian
O’Neill, Strategic Marketing Director,
Friends First added “We like supporting
constructive activity in our local community
and St Tiernan’s Cycling Club is part of our
community. We like the fact that cycling is
an all-inclusive sport that can be enjoyed by
Pictured are: Emma Barrett (The Irish Cancer Society), Tom Browne (Chief Executive, Friends First) people from all walks of life. It doesn’t matter
Sinead Gillespie (The Irish Cancer Society), JP Hughes (Chief Commercial Officer, Friends First) if it’s a three-year-old child learning to ride
a bike for the first time or a seasoned road
racer - cyclists all have the shared experience
of better health through exercise and the
sense of freedom that comes with seeing the
world on two wheels.”
RIGHT
Pictured are Richard Gallagher (Friends First) who’s a member of the cycling club,
Tom Browne (CEO, Friends First) and top Irish rider from UCD Anthony Walsh
Autumn 2014
Summer 7
The BROKER
Are you using Google Analytics
to Measure your Marketing
Activities?
Online marketing tools have changed the game in relation to
marketing by Financial Brokers. These tools offer a number of
benefits: immediacy, better targeting, cost effectiveness and
fantastic insights through the analytics available.
Most advisers are pretty clear about these advantages; however
many still run online marketing campaigns without really leveraging you can make sure that they are included in your website content
the power of the analytics available. Now there’s no doubt that and in any blogs that you write.
Google Analytics is a bit of a monster: there’s a huge amount of If your traffic is coming from social media, you can drill down and
EAMONN TWOMEY data available, to the point of it being a bit overwhelming! So here see which channels are delivering traffic. Is it the post that you are
StepChange Ltd are some of the most useful measures available to you, to help you sharing on LinkedIn or is it your Twitter feed that’s driving your traffic?
really maximise the potential of your online campaigns.
And then when they get there …
Some basic trends The behaviour section in your analytics gives you great insights into
The following measures can give you a good overall sense of what people are actually doing when they land on your site. Apart
whether or not recent marketing activities are working, when you from some of the trends mentioned earlier, there are other really
look at the trends over the period of the campaign and compare useful insights to be gained in this section.
them to previous periods. You can identify which pages people are entering your site
on. This will help you to analyse the traction your blog posts are
• Number of visits: This gives you a good sense of whether or not
your activities are increasing traffic to the site. The number of page achieving (or not). You can also see which are the most frequently
views is another measure of this. viewed pages; this will give you a sense of the areas of main interest
• Number of visitors: Are your activities driving lots of visitors, or are to the readers. Of course when you then overlay the time spent on
the same people tending to return on multiple occasions? each page and from where people are exiting the site, you start to
• New vs. returning visitors: Are you attracting high numbers of get a real sense of where content is strong and where it is weak. You
new visitors to your site for the first time, or are you mainly only can then ensure that you have crystal clear ‘Calls to Action’ on these
attracting existing users back? This might suggest your marketing high performing pages, giving you the best chance of turning these
efforts are not reaching new audiences and need to be reviewed. readers into enquirers and hopefully customers!
• Pages per visit: Once people are landing on your site, are they You can then run the reports across multiple dimensions for some
having a good poke around (as you want them to do), or are they really useful insights — find out where your traffic is coming from
leaving quickly? and also where it is landing. This might demonstrate the success of
• Time spent on site: Similar to the last one – is your content actually your blog for example, and the channels through which people are
engaging the user to spend time reading it or are they leaving finding your content.
quickly?
• Bounce Rate: The big baddie … are people leaving the site from Check out the spikes
the page they entered without bothering to check out any other
The spikes in activity, either in visitor numbers or page views, can
content?
be very revealing. When you dig into these, you will usually find that
• Number of views on devices: This is becoming more and more
a marketing activity or other event is behind these spikes. This can
important. Where are people viewing your website and, as the
number of views increases on phones and tablets, how does your give you really useful direction for future marketing activities — a
site appear on these devices? campaign that you are thinking of running, where to attract future
traffic to the site or the type of content to be writing. At a minimum,
Once you get a handle on these, you’ll start to get a sense of whether it may well give you some confidence that your existing approach is
or not your efforts are moving in the right direction. And then you the correct one!
can start to get into some really useful analytics … These are just some of the insights that can be gained from
Google Analytics. I’d suggest you go in and poke around; you’ll be
Where visitors are coming from amazed at the valuable information that can be gained!
The acquisition section gives you great insights into the sources of
your traffic. Are most people arriving directly by typing in your URL; is
your website address memorable? Or are they searching for your site StepChange assists Financial Brokers in the development and
in Google and, if so, what keywords are they searching to end up on delivery of their business strategy, growth and marketing plans.
your site? Once you know the keywords that people are searching, www.stepchange.ie
8 Issue 46The BROKER
Rabbit stays in the Hat, for now
Contrasting the more optimistic news from the US and improving after a troubled start to the year, notably the
even China recently, the bulk of the economic data housing and manufacturing sectors. The stronger data,
from the eurozone has disappointed. This has led to in combination with the expectation for further easing
serious concerns about the outlook for regional growth from the ECB, has propelled the S&P 500 above 2,000
and inflation, and raised expectations for a further for the first time, returning 4.0% over the month.
loosening of monetary policy from the European Central The downbeat inflation expectations are naturally
Bank (ECB). But will ECB president, Mario Draghi, pull a being reflected in bond markets, and particularly the
rabbit out of the hat? yield on the German government bond. The yield on
KEVIN COUGHLAN At the time of writing, the consensus estimate for the 10-year Bund fell to 0.93% on the 25th of August,
Head of Ireland Business eurozone inflation for August is 0.3% year on year — a a record low and lower than during the height of the
J.P. Morgan worryingly low figure — and the number will come out eurozone crisis, when demand for safe haven assets
Asset Management ahead of the ECB’s September meeting. Expectations was as its highest. This has pushed the spread between
for further easing are pretty high after Draghi’s Jackson German Bunds and US Treasuries to 146 basis points.
Hole speech, in which he stated that the ECB governing However, this spread is not actually that unusual in
council acknowledged the recent drop in markets’ the current climate. The US Federal Reserve (the Fed)
inflation expectations. and the ECB are at different stages of their monetary
One of the key tenets of Draghi’s argument in the policy cycles as the eurozone economy has stagnated
past against a bond buying programme, or quanti- while the US economy has been relatively robust, and
tative easing (QE) — that inflation expectations are inflation in the US is not far off the Fed’s target.
firmly anchored — no longer holds. Five year five-year Geopolitics will also be having a larger impact on
inflation expectations (that’s not a typo, it’s market Europe. The Ukraine/Russia conflict is weighing more on
expectation of what inflation will be in five years’ time, Bund yields than other core government bond markets,
five years from today) have fallen recently, dipping given the closer economic ties between Germany and
below 2%. In the shorter term, the two year two-year Russia, as well as the still unknown impact of sanctions.
inflation expectations have fallen even more sharply. Business and consumer surveys from Germany certainly
Unlike Draghi, Fed chair Janet Yellen gave little away highlight these concerns and have been much weaker
at her Jackson Hole speech and the outlook for US rate than expected recently.
rises remains data dependent. That data is getting It is increasingly looking like the ECB will take
stronger. Second-quarter US GDP was revised up to 4.2% further policy steps before the year is out, but I don’t
year on year as inventories contributed more to growth think we will see the outright QE that the market is
than first thought. This has negative implications for currently expecting. Although QE is definitely on the
the third-quarter figure, as destocking will become a table and we may see it introduced next year, the form
drag on economic growth. While the focus remains on that it would take is anyone’s guess. There is likely to
the labour market, other areas of the US economy are be more tinkering around the edges of the package
announced in June for targeted long term refinancing
operations (TLTROs). The first TLTRO comes into effect
in September and the ECB will want to see a strong
uptake from banks for the cheap funding to boost
sentiment in the region and bring up the flagging
inflation expectations. Further down the line, the ECB
will want to digest the impact of the TLTROs on bank
lending and the market reaction to the announcement
of the bank stress tests.
The ECB can only do so much. The fate of the
eurozone rests in the hands of individual governments
as fiscal and monetary policy cannot compensate for a
lack of structural reform — the actions of the ECB do
not relieve governments of the reform burden.
Finally, it’s worth remembering that the hurdle to
full QE is still high. Even if the Germans appear to have
warmed to it, it is still politically difficult; and, more
importantly, implementation is problematic. The ECB
will want to be sure that it is an effective policy that will
have the desired impact before heading down a path of
no return. For now, the rabbit stays in the hat.
Autumn 2014 9www.brokerfirst.ie
5 Reasons why we’re your
#1 for Income Protection
#1 36 years as the market leader
We know more about supporting claimants - from initial claim through
assessment, treatment, rehabilitation and getting back to work – than
any other provider.
#2 Comprehensive claimant services and support
from start to finish
Claimant welfare is our priority, which is why we offer independent
medical assessments, tailored rehabilitation programs and specialist
treatment options.
#3 Over €31 million in claims in 2013
Our fair and principled approach to paying claims saw us pay
€31.6 million to 1,365 claimants in 2013 alone.
#4 88% of our claimants would recommend us
You don’t have to take our word for it – 88% of claimants
independently surveyed by iReach would recommend our
Income Protection products and services.
#5 Voted IBA Best Income Protection Product
The IBA has awarded us Best Income Protection Product of
The Year every year since 2011.
Find out more about why we’re your
#1 for Income Protection. Contact your
Account Manager or visit brokerfirst.ie
Pensions Protection Investments
Friends First Life Assurance Company Limited is regulated
by the Central Bank of Ireland. Terms and conditions apply. FFGENERALThe BROKER
Helping Financial Brokers to
Deliver their Goals
Insights from the Foresight Broker Development Programme
Friends First developed the Foresight Development • They are too focused on acquiring new clients
Programme exclusively for Financial Brokers, and eighty and new product sales rather than on advising and servicing
progressive Brokers from around the country completed our existing clients and being paid for it.
intensive four module programme over six months. Most • They need to develop more and a higher proportion of sus-
participants are now progressing in upgrading their business tainable long term recurring income - up to 50% of total in-
to one that can better serve their targeted clients and their come.
business needs. This programme also fully complements
the excellent work undertaken by PIBA to document and • They need to be clear on the type of clients they want to at-
communicate best practice for Financial Brokers across a tract and keep and develop a better, more lucrative relation-
JOHN CORR
number of disciplines and areas. ship with them.
Commercial Transition
Director • They need to spend more time doing what clients really
The Friends First Foresight Programme:
Friends First value and will pay for and less on activities that they do not.
• Is a practical management and development programme
for life and pension Brokers designed for business owners. We provided participating Brokers with tools, techniques,
templates and frameworks supported by the expertise of our
• Aims to provide them with the capability to complete a external facilitators at each of the modules and in between
change programme to develop a more profitable client the modules to give them the overall template to change their
focused financial advisory business. business. The process requires time - up to two years, dedication,
This article outlines some of the Broker insights from the some short term sacrifices and difficult decisions; but will be
programme, which include some of the challenges that worth it.
Brokers are facing and the solutions we jointly developed with Following completion of our first Foresight Programme
them to overcome any obstacles to starting the improvement we are now implementing a programme of follow up support
process. activities for these Brokers, as well as other interested Brokers,
The views of the participating Brokers of their businesses called Foresight Plus. As reported regularly in The Broker
(see diagram) are included under the four main areas where magazine there are external challenges that will have an impact
we highlighted that they should increase an understanding on how Financial Brokers operate in the future: many of these
of their business. will be regulatory or compliance driven. From the research and
We also gave Brokers a simple framework for developing site visits that we have conducted internationally we have found
a business plan, setting out what they need to achieve to that Brokers who were progressive in changing their business on
improve their business. We called it the Four Cs: their own terms have proven to be the winners in the markets
that they are operating in.
1. Clarity: Through a three-year business plan — confirming If you would like to know more about the Foresight
where the Broker wants to take their business and why. programme or some of the tools and practices we have
2. Competence: Tools, processes and techniques that developed to assist Brokers to change please contact your
are available to each participating Broker to help them Friends First Account Manager or feel free to contact me directly.
complete the plan and the activities to
1 3
complete the change process. BUSINESS TYPE & PROPOSITION FINANCIALS
3. Confidence: Knowledge that they are doing • Majority are owner proprietor • Not focused on long-term value
• Most have no written business plan or • Limited cash flow management
the right things and focusing on the correct defined objective • Business model is transaction and
priorities, maximising their time and resources. • Lifestyle businesses where sufficient income product-sales orientated, not service
is generated • Remuneration mostly upfront
• Limited asset value
4. Control: Make the decision to take better commissions
• No defined exit strategy • Short term month-to-month focus
control of their business: what it’s about, where
it’s going and how it’s going to get there. 2 4
CLIENT PROPOSITION OPERATIONS & MARKETING
The key insights from participating Brokers were • Not clear who they want to do business with • Inefficient, not supporting business
or why development
that: • No defined client proposition
• No segmentation of clients • Focused on new business, not service
• The business model that has served them well to • All clients receive same service • No marketing planning in place
• Can’t calculate customer value
date is not meeting their clients’ requirements • Client proposition sales focused, not advice • Ad hoc activities achieve limited value, so not
and service focused repeated
and therefore needs to change.
Autumn 2014 11The BROKER
Keeping Construction Vandals at Bay
With renewed activity in the construction industry, many abandoned arson offences down almost 8% in the 12-month period ending in
sites are being reactivated, which in turn triggers an increased March 2014. The vast majority of offences recorded in this group
threat of vandalism. Traditionally, construction sites with their were for criminal damage (not arson), which decreased by almost
costly machinery and valuable materials have been easy prey 9% to 26,267 events.**
for a resourceful criminal. Furthermore, vandals often entered A clear arson prevention strategy can protect lives, equipment
construction sites with their sole purpose being to destroy and wreak and properties. A fire risk assessment should be conducted once
havoc. This type of wanton vandalism was often premeditated and the site is set up and regularly reviewed to ensure it reflects the site
hard to prevent without Garda intelligence and intervention. Many conditions. This process will help to identify steps that can be taken
RONAN MEGHEN construction site owners also fell prey to side-effect vandalism, to reduce the risks from arson through improved security, reductions
Risk Analyst whereby thieves caused destruction while pilfering fixed and unfixed in the use of combustible materials and better housekeeping.
Zurich Insurance building materials. Although challenging to counteract, a robust
security plan will go a long way in preventing this type of property The cost of metal
damage. Where vandalism and arson are concerned, prevention is better
While vandalism continues to be a widespread issue, it’s the than cure. Construction sites are targeted more frequently by op-
threat of arson and metal theft that now takes centre stage in portunistic thieves looking at valuable materials as prime targets –
the headlines. Loss and damage to valuable assets will have an especially when security is lacking. Theft of materials such as copper
immediate effect on a business’s direct costs, can affect associated cabling and steel girders can be costly and can lead to consequen-
costs, and can even halt operations in extreme cases. tial loss: for example water damage as a result of stealing lead roof
In June this year, an Eircom spokeswoman said that the flashings.
company had suffered 21 incidents of metal theft so far in 2014, Barbed wire, anti-climb devices and grease paint are sometimes
with wiring worth over €21,000 taken. She said that there were used as deterrents to potential thieves or trespassers, but care needs
200 incidents last year, including 60km of cable worth €240,000 to be taken to ensure that these are properly identified with warn-
taken. During a three-week period in December 2013, Electric ing signs and not in a position that could potentially cause injury to
Ireland recorded 12 thefts of power cables.* Undoubtedly metal innocent passers-by.
theft is not a victimless crime and the importance of maintaining
robust security arrangements can’t be underestimated. As Financial Security watch
Brokers and insurers, it’s important that we help customers remain Proven deterrents to thieves include: external lighting, remote
vigilant to risks. alarms and CCTV. Bear in mind that if CCTV is installed, signs must
be displayed if the footage is to be used as evidence. Remember
Minimising the Risks to install lights and cameras as high as possible in order to prevent
Effective site management techniques will help lower risks. A simple malicious damage by intruders.
act like limiting site clutter will go a long way in helping to make While damage is usually covered under insurance, it’s often the
unauthorised people stand out. Other top tips include: case that claims can be below excess levels. Insurers may impose
security requirements on construction sites and failure to comply
• GOOD STOCK MANAGEMENT
Reducing available stock and taking a just-in-time approach to could mean that a loss is not covered, so Financial Brokers need to
delivery will help eliminate temptation for potential burglars. ensure that their customers are aware of this. Site agents should
• USE SITE ACCESS CONTROLS be made aware of all requirements, support and resources to help
Implementing a structured sign-in/out system for everyone on them comply.
site will make it increasingly difficult for unauthorised people to
gain access. Expert advice
• CLEARLY LABEL STOCK Customers rely on the expert advice of their Financial Broker to
Clearly labelling plant and equipment to make it easily identified help them appropriately manage risks to their property. With this in
and recognised will help discourage opportunistic thefts. mind, it’s vital that Brokers partner with an insurer who has the local
• IDENTIFY BLIND SPOTS knowledge and global expertise to help them accurately advise their
Regular walkthroughs around the outside of the site will help customers. It’s precisely this type of expertise that Zurich offers as
highlight security blind spots that offer easy unauthorised part of its ongoing Broker Commitment Programme. To learn more
access. about Zurich’s commercial property or risk management solutions,
• MAINTAIN A VISIBLE PRESENCE please talk to your Business Development Executive.
Where possible, place site huts in areas that may pick up
suspicious behaviour more easily. * “Gardaí arrest 27 in blitz on metal thieves”, Cormac O’Keeffe, Irish
Examiner, June 2014.
Catching fire ** Group 12 Damage to Property and to the Environment, Recorded
Historically arson is one of the most frequent acts of criminal dam- crime incidents classified by offence group, annualised total, Q1
2013 and 2014. CSO Ireland.
age caused to construction sites but despite outstanding challenges
in market conditions, incidents of arson are falling, with recorded Zurich Insurance plc is regulated by the Central Bank of Ireland.
12 Issue 46The BROKER
PIBA General Insurance Bootcamp
in association with Zurich Insurance
PIBA in association with Zurich ran a CPD Bootcamp on Thursday the
25th of September 2014 in the Citywest Hotel, Saggart, Co. Dublin.
The topics covered included property insurance, duty of disclosure,
household insurance and health insurance.
David Hayes (Zurich) Vincent Glavey (Glavey Financial Services) David Holton (PIBA), David Hayes (Zurich)
Frank Bodley (Bodley Financial Services) Tom O’Keeffe (Naas Insurance and Finance) Patsy Nugent (Nugent Insurances Ltd)
Charles Daly (Charles J. Daly Insurances) Terry Hardiman (Terry Hardiman Insurances, Dublin, Ltd)
Maurice Harnett (Naas Insurance and Finance) Alan D’arcy, Sarah Fay, PJ Kearns, Conor O’Neill (Zurich) Alan D’arcy (Zurich)
Brian Andrews (Brian Andrews Insurances Ltd)
Geraldine Furlong (Zurich) Paul Murphy (Phoenix Financial Services) Sarah Fay (Zurich)
Hugh Sheridan (Hugh Sheridan Insurances) David Hayes (Zurich) Brian Murray (Brian Murray Financial Services)
Sarah Fay (Zurich) Dermot Martin (Mortgage Investment Brokers) Rachel Doyle (PIBA)
Autumn 2014 13Chiny.
Seasoned traveller,
West Wing fanatic.
Senior Broker
Marketing
Specialist.
The Zurich CPD Programme was specially
designed to demonstrate our commitment to your
professional development.
Want to learn more?
Ask Chiny.
She and her colleagues work to deliver an exciting
series of online and face-to-face CPD opportunities
to help you do better.
Because the better you do, the better we do.
To find out more about the 2014 Zurich
CPD Programme, visit zurich.ie/brokers
Our Broker Commitment Programme
Strength
Strength
Strength Innovation
Strength
Strength Innovation
Innovation
Innovation
Innovation Claims
Claims
Claims Claims
Claims Expertise Technology
Technology
Technology
Technology
Technology
Expertise
Expertise
Expertise
Expertise Service
ServiceService
Strength
Strength Innovation
Innovation Claims
Claims Expertise
Technology
Technology Service Service
Expertise
*Best CPD Programme, IBA Insurance Service Awards 2013, 2012 & 2011
Zurich Insurance plc is regulated by the Central Bank of Ireland.The BROKER
Platforms –
There to be stood on!
Platforms can present both an opportunity and a threat in an picture of a client’s needs and objectives, can have this relationship
intermediated market — are platforms there to assist or to replace protected once they introduce their business to another entity for
the Financial Broker? The fact that we are still here operating as the execution of their advice.
Brokers and advisors in a world where direct-to-consumer online Example: An advisory firm had developed a clear and well defined
models are broadly available is testament to the fact that people investment proposition over the last decade. However, as a retail
still value advice, and are willing to pay for it. intermediary, they have no option but to pass their proposition to third
This brings us to the core question — how do I use platform- parties for execution. In doing so, they felt they were in danger of having
based solutions and ensure my role as an advisor is still front and their brand diluted. Platform flexibility now means that they have
RONAN GAHAN centre with my clients? their own online client portal and account-opening documentation
Group CEO describing their investment proposition. When they present their
Platform Capital Group investment solutions, the value proposition communicated to the client
(Conexim, One Platform &
Quayside Fund Management)
is clearly their own. The brand of the platform or the life assurance
company supporting the advisor is very much secondary.
(P) Predictable: It is becoming increasingly common to have
conversations with intermediaries who are trying to put a capital
value on their business: to plan an exit, facilitate a merger or put a
succession plan in place when retiring. Building a sustainable and
predictable income based on assets under advisement (AUA) can
be a key way to achieve this.
Detailed below are five cases where firms had identified specific Example: A busy Financial Brokerage identified that they had serviced
A platform, quite goals, categorised using the ADOPT methodology, used when as- over 1,000 clients in protection, pensions/investments and mortgages
sisting Financial Brokers and advisors in Conexim and One Platform. over the last five years, but were concerned that they could not put a
literally, should
(A) Administration: Technology should be a key driver in reducing value on any particular business line as they could not predict whether the
be something to
administration. If we can make this more streamlined we can spend income would reoccur the next year. By using platform-based CRM tools
stand on top of. they are segmenting their book and identifying those clients with recurring
more time focusing on clients’ needs and objectives. Clients don’t
pay Financial Brokers for administration; they pay them for advice. financial-planning requirements and those who only require occasional
A platform Example: An advisory firm’s objective for using a platform was to
transactional services. By moving their pensions and investment business
should support to a model where they are remunerated on AUA only, they have a steady
reduce the amount of time spent on case processing so that the firm’s
and predictable income that aligns their interests with their clients’ —
an advisor’s administrator, who was a QFA, could instead provide direct advice to the
growth of wealth in risk-rated portfolios, which is provided alongside their
proposition – not firm’s clients. Routing the processing of investment and pension orders
more transactional protection and mortgage business, which is still a
via a single administration platform has freed up the administrator to
become the valuable, if less predictable, contributor to their bottom line.
spend more time in a client-facing role.
proposition. (T) Tailored: One of the main reasons to migrate client assets to
(D) Defensible: It can be challenging for intermediaries to maintain
a platform is the level of customisation that can be provided on a
the number of systems required to produce meaningful analysis
‘client by client’ basis.
and comparisons on a ‘whole of market’ basis and to produce
bespoke advice and recommendations for clients in a robust and Example: An advisory firm had a number of clients who had invested
defensible manner. heavily in Irish bank shares and exploration stocks in accounts
introduced to stockbrokers. The advisor met with their clients as part
Example: A newly established firm felt strongly that their value
of an annual review and advised them on the merits of moving to a
proposition to clients was to provide risk-adjusted goal-based financial
more diversified fund portfolio. However, the clients wished to retain
planning services, and specific investment selection was a secondary
their holdings in the bank stocks given their current valuations. Having
part of the service. With the ability to compare and contrast platform-
a platform solution meant that there was flexibility for a single account
based discretionary fund managers as well as offerings from life
to hold both the legacy assets and the new fund-based portfolios,
assurance companies, the firm was satisfied that the implementation
meaning the advisor could provide full holistic advice.
of their advice across a blend of life and platform investments was very
defensible.
(O) Ownership: Client ownership is a key issue in the Broker Platform Capital Group is an Irish Financial Services Group established to assist
market, particularly where intermediaries introduce their clients regulated intermediaries in building and broadening their client offerings. In
August 2014 it acquired Conexim Advisors Ltd, IFG Investment and Mortgage
to entities who also have direct client arms. The question arises Services Ltd trading as One Network and One Platform; and established
how an intermediary, having produced a very clear and detailed Quayside Fund Management Ltd.
Autumn 2014 15The BROKER
My MDRT Experience
By Myles Roban
Roban Insurances Limited
The Million Dollar Round Table experience was held in Toronto this year: So we had the main platform sessions and the focus sessions; and
and what an experience it was. About 60 advisors made their way then we had the late sessions! They were a different type of session
from Dublin in early June. The event is held over four to five days and is but just as much fun! These ‘sessions’ enabled us to make connections
non-stop from beginning to end! We would attend the main platform and friends from all over the world, with one thing in common: we all
sessions from 8 to 12 each morning and then we had a wide choice worked in the same industry. An underlying theme that operates all the
of workshop sessions each afternoon. The main platform speakers way through the week is that of sharing and connecting. Everybody
were widely varied: from practitioners to people with amazing life there is truly interested in getting ideas for improving their business and
experiences, including a young lady who survived 18 months’ captivity sharing ideas for improving somebody else’s business!
by Somali pirates, to mention but one. Every speaker was of top quality It’s fairly easy to outline the event in fact, but it is much more
and their presentations were delivered with the support of incredibly difficult to try to convey the atmosphere, the energy and the
professional event management. camaraderie that you experience at this event; or maybe, more aptly,
The afternoon sessions were more focused, covering areas such as this occasion. We work hard day after day throughout the year and
retirement planning, estate planning, selling protection, etc. There was this event, I have to say, was a great respite. It served to recharge
a choice of an average of 20 focus sessions each afternoon so there the batteries, re-enthuse, generate new ideas and make new
was always something that met our needs and interest. One particular friends. An excellent experience — roll on
session that had a real impact on me was given by renowned sports next year!
journalist and author Don Yaeger, who shared the ‘16 Consistent
Characteristics of Greatness’, derived from interviewing the
greatest sports people in the world. An entertaining,
informative and motivating session
delivered brilliantly!
TOP
1. Terry Hardiman, John Murray, Michael Deasy
2. Paulette Sopocco, Michael Sheehan
3. Michael Deasy, Liam Carberry, Terry Hardiman
ABOVE
4. Anthony Jones, MDRT Speaker
5. Maurice Hedderman, Patrick McEntee
LEFT
6. Myles Roban, Brendan Kearney, Fergus Hanly
16 Issue 46You can also read
